Implications of new IT models

August 02, 2016

The dot-com crash brought about a lot of changes, including new ways of thinking about business technology.

One innovative idea was to break up IT assets into modular chunks that could be delivered as services. 

The "service-oriented architecture," or SOA, dominated boardroom discussions, strategic planning meetings and conference agendas, but the concept never really took off. For most companies, the vision proved too complex. 

Still, while SOAs may have fizzled out, a new and better vision of applications and data delivered as on-demand services came to life. We speak, of course, of cloud computing

In most cases, a lot of flexibility is also needed

Fast forward to 2016, and the cloud's various incarnations, and its steady invasion into the heart of most companies, has completely turned the approach to IT on its head. The analog days of IT teams spending their time deploying unwieldy enterprise applications on mainframes, and then maintaining banks of servers to deliver those applications to desktop PCs, are quickly coming to an end.

Instead, companies today are transforming into digital businesses, shifting their core IT services to a subscription or on-demand basis, and in the process freeing up IT to become a more strategic part of the business. But here's the tricky part: Whether those services are hosted by a third party, delivered from an internal private cloud, or spread amongst a hybrid of platforms, there are numerous models to choose from in obtaining those services, each with its own benefits and drawbacks. 

Meanwhile, businesses face increasing competitive pressures as their technology falls behind. IT leaders are compelled to optimize their IT infrastructure spend to match their business requirements. 

According to McKinsey, by 2025 the mobile Internet could have an economic impact of $11 trillion

In most cases, a lot of flexibility is also needed. A recent McKinsey study scratches at the surface of the scalability near-future networks will need to have: It concluded that by 2025, the mobile Internet could have an economic impact of as much as $11 trillion, automation of knowledge work could contribute up to $7 trillion, and the Internet of Things could generate as much as $6 trillion

In other words, networks over the next decade can be expected to face an onslaught of mobile demand, automated digital processes, and billions of devices talking to each other.

What model is right for what company is a question that must be answered on a case-by-case basis. While some industries might be best suited for pay-per-use arrangements that allow them to dial IT assets up and down as conditions change, others might have more consistent needs that make investing in the hardware needed to establish a private cloud a wiser move

For instance, education is a good fit for pay-per-use or subscription models. Schools tend to be dark on weekends, holidays and summer vacations, times when owning and operating private cloud hardware would represent an unnecessary drain. Conversely, financial services companies lean toward owning and operating their own clouds, not only because they face demand around the clock, but also out of concerns related to securing sensitive data.

That said, not all industries have such cut-and-dry criteria. Most companies are struggling to determine which model is right for them. For this reason, CIOs and their lieutenants need to make an extra effort to ensure their choices enable them to deliver what the business needs.

CIOs need to be proactive with business decision-makers in designing the end-to-end results that are most beneficial to their customers and employees, as well as from a cost perspective.  

But it's not just IT leaders who need to be making proactive decisions for the business. Providers also must be thinking through the models they offer to ensure they meet customer needs, and they make sense in the context of the product or service they're delivering. 

Vendors are adapting by delivering out-of-the-box solutions to meet the needs of its customers, and their end-users. This empowers partners to tackle opportunities in a wider array of markets, delivering technologies that were once exclusively for large enterprises to small and medium-sized businesses.

By offering technology and innovation that can be used to support multiple business models, ALE hopes to help make some of today's complicated IT decisions just a little bit easier.


Jose Femenia

Director marketing and communication for Spain and Portugal

Director marketing and communication for Spain and Portugal.

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